Tuesday, January 26, 2010

Silicon Valley often equates buzz with success despite there being a lot of high profile flameouts. Instead of focusing on buzz, I tried to find a handful of companies that are "diamonds in the rough" - they don't get covered a lot by TechCrunch, GigaOm or VentureBeat, but they are kicking serious butt.

Here are 5 companies that are more or less off the radar for people in the digital media world that are getting great traction (read, ~$100m to many hundreds of millions of $ in revenue):

Palantir. Co-founded by Peter Thiel, Palantir provides data analysis and visualization tools to both government and finance. They are growing revenue like mad and have 1 of the very strongest teams in Silicon Valley. Largely funded by high net worth individuals and (I think) Clarium Capital.

Workday. Co-founded by David Duffield (founder and CEO of PeopleSoft), Workday provides ERP software as a service (in particular HR and finance management). They raised $75 million in financing in April, and apparently are killing it.

Arista Networks. Co-founded by Andy Bechtolsheim and David Cheriton and run by Jayshree Ullal, Arista is apparently ramping revenue like mad in the 10GigE space. AFAIK the company is entirely funded by the founders, so they have a lot of freedom of direction.

Coupons.com The de facto leader in online couponing (due in part to a large patent portfolio), Coupons.com has supposedly reached a few hundred million in revenue. The company was entirely bootstrapped with the exception of some angel money (from what I hear).

Silver Spring Networks. I think some of the earliest innovations in clean tech that will make money are ones that either take advantage of government subsidies or are incremental ways to modify the power grid (longer term, the more disruptive stuff will mater). Founded in 2002, Silver Spring is on a good revenue ramp and rumor has it they are break even or very close to it.

Interesting characteristics of these companies:

3 of these 5 companies were started by well known entrepreneurs who have already started awesome companies - so there may be more serial entrepreneurs that do more then 1 big hit out there then people usually talk about.

3 of these 5 companies took non-traditional paths to getting funded. This may have given them more freedom early on, or alternatively forced them to focus on revenue and building a sustainable business early on.

4 of the 5 companies have nothing to do with digital media/consumer internet.

Correction: Turns out Palantir also received funding from Founder's Fund and InQTel (VC arm for the CIA :)